Daikyo Brokerage Limited Releases Study: Charting a Course amid All the “Noise”: Caution Will Be Critical
With so much noise, it is difficult to invest with conviction, the study notes
“We generally like equities for 2015. But we are not enamored.” US companies, which offer the best metrics globally, enjoy fat profit margins, and corporate profits as a percentage of GDP hit a post-WW II record of this year. However, Daikyo Brokerage Limited cautions, this benefit reverses once fiscal tightening sets in.
Income remains a dominant, global investment theme; the BII notes that most investors – both institutional investors and retirees -- are desperate for income to match their liabilities, a tall order in a world of record low yields and much longer lives.
“Some investors are sacrificing safety and liquidity just to gain a couple of basis points of yield,” Huo Yueting, President Institutional Securities and COO, Daikyo Brokerage Limited International said. “Markets may pre-empt the Fed, and trigger a rush (out of fixed income) for the exit (to equities). Safe-haven fixed income assets may well provide disappointing returns from here.”
Quality businesses and dividend stocks would likely underperform leveraged companies as the flow out of income could result in a temporary “dash for trash”. “Casualties would be 'safe' assets such as government bonds of the US, UK, Germany and other Eurozone core countries. It takes just a miniscule rise in yield to trigger sizable bond price losses.”
To prepare for such a day, it is important to identify areas of value in income investing – and pockets of overvaluation or risk.
About Daikyo Brokerage Limited
Daikyo-Brokerage-Limited.com is a privately held financial institution that has been a prodigy of the financial markets since its inception. The firm serves the most discriminating and sophisticated individuals and institutions in: Investment Management, Investor Services, M&A Advisory and Wealth Management. Daikyo Brokerage Limited’s culture of accountability fosters deep and lasting relationships built on commitment, adaptability and trust. The company is independent, selective and specialized. Daikyo Brokerage Limited provides investor services in close to 100 markets for many of the world’s leading individual investors, asset managers and financial institutions. Daikyo Brokerage Limited is consistently ranked among the Asia’s most acclaimed custodians, asset administrators, foreign exchange, and securities lend
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